No conflict of interest, says government

The government does not believe that Freeport chairman Marin Hili's acquisition of a stake in the container port in Venice gives rise to any conflict of interest, the ministry of economic services said yesterday.

The ministry also said that it would have been strategically unwise for the Freeport to buy shares itself in the Venice port.

Earlier this week, Mr Hili himself insisted there was no conflict of interest and that he would be ready to step down if the government believed there was.

However, a statement issued yesterday by Labour education spokesman Evarist Bartolo, who is not the spokesman on the Freeport, said that the government had come out with weak arguments to conceal the conflict of interest that existed.

The ministry of economic services said that over the last couple of weeks, Economic Services Minister Josef Bonnici himself had made various public statements in which he reaffirmed that the government did not see any conflict of interest in Mr Hili's involvement with the Venice port.

"Despite this categorical declaration on the part of government, the opposition has persisted in an orchestrated campaign to blow up what is basically a non-issue."

This week, in line with this campaign, a Labour MP had raised a question about what he claimed to be an incongruity between the Freeport's part ownership of the Italian port of Brindisi and the failure to acquire a similar shareholding in the Venice port. In this context, some basic matters ought to be clarified, the ministry said.

"Malta Freeport's mission is to lead a transhipment hub in the full realisation of Malta's position in the Mediterranean.

"The Freeport made its first attempt to acquire a port concession on international territory in 1997 by setting up a company with the aim of operating a container terminal facility in the port of Taranto. This attempt was unsuccessful.

"A few months later, in 1998, discussions commenced with the authorities in Brindisi for the concession of an area in the port to be developed as a container terminal. Brindisi, which is located only 42 miles away from Taranto, offered the same business opportunities as Taranto due to the location proximity. This time, the Freeport was successful in obtaining the concession to operate the container terminal facility in Brindisi.

"The Freeport was able to make this acquisition by winning a public call for tenders issued by the Italian authorities and not through the direct purchase of shares. The Freeport's rationale both in Taranto and in Brindisi was to create strategic opportunities within the same market that the Freeport itself operates in - transhipment in the centre of the Mediterranean."

Besides, the government said, the port of Brindisi had added value to its business portfolio by handling the containerised cargo for the southern Italian regions.

On the other hand, the Venice port was completely outside of the transhipment sphere of activity. For a variety of reasons, it was not and could not be a transhipment port. It was located over 700 miles off the normal hubbing routes and was unable to handle ships which required a seawater depth of more than 12 metres.

"The Venice port is therefore not a competitor, nor does it offer services that would assist the Freeport in reaching its transhipment and hubbing business targets. In this light, it would have been extremely unwise on all fronts for the Freeport to consider the purchase of shares in the Venice port."

In his statement, Mr Bartolo said that what the government was not saying was that since Mr Hili got involved in the Venice port, plans were being made for the port to enter the container sector and to service 100,000 containers next year, working on the routes covering the Mediterranean, Middle East and Far East.

Mr Bartolo said that there were many developments in the Adriatic sea where the Venice port was located and that in the coming years it was expected to obtain strategic importance in transhipment in the Mediterranean and the rest of the world.

Mr Bartolo mentioned a recent edition of the specialised magazine Fairplay which stated that the Brindisi Terminal, in which the Freeport has a 40 per cent stake, was weak because "the Malta Freeport owner" was more interested in what was taking place in Malta.

Mr Bartolo said that Mr Hili had publicly declared that if he had to choose between his private interests and his public appointment, he would choose his private interests. He said that there was a real risk that the person running the Freeport was focusing more on Venice than on what was taking place at the Freeport.

"This is why the code of ethics of serious countries requires that whoever is found to be in a situation of conflict of interest should choose between his private interests and public role."